To OTC Journal Members:
 

Question: What Do These Three Companies Have In Common?

Answer

• They are all in the information technology business.
• They are all losing money.
• The price of their stocks has appreciated substantially this year- TSCM up 53%, PCOR up 48%, and MKTW up 68%.

As you can see, each of the stocks, perhaps with the exception of PCOR, has had its ups and downs over the course of the past 90 days. PCOR has been going straight up. Three other companies I'm not showing which also compare include CNET (up 220% over the last 90 days), Hoovers which was bought out by Dun & Bradstreet, and Multex which was bought out by Reuters.

Here's an idea in a stock in this same group which is undervalued as compared to its peers, and is due to join the party soon.
 

StockGroup Technologies (OTC BB: SWEB)- When Will This Stock Join the Party?

StockGroup has enjoyed a great first half of the year, but has not joined the appreciation party in this industry group. The company has grown its corporate customer base to 300 clients, reduced a substantial debt burden to next to nothing, garnered institutional sponsorship for the first time in three years, become the digital financial information solutions provider for the Associated Press, and landed Microsoft as a client. 

In fact, Bill Gates said the following about StockGroup: "The Stockgroup solution allows us to continue to be a leader by providing our users with the latest up to date financial news, while providing the most cost effective solution," Bill Gates, Microsoft Chairman and Chief Software Architect. (Nov. 2002)

Despite all these positive developments, StockGroup's shares have been stuck in the mud, trading between the $.25 and $.30 level for four months.

It seems to me that everyone wants to buy stocks when they are hot and moving up. No one seems willing to just accumulate shares when the stock is trading quietly, with an eye towards selling when everyone is buying. If you had used this strategy and bought SHEP Technologies two weeks ago when it was trading quietly and no one wanted it, you could have watched the stock appreciate 300% in two weeks, and been in a position to take a substantial profit.
 

Undervalued As Compared To Its Peer Group

As compared to the stocks listed above, I believe StockGroup should be trading at about $.42. >From today's closing price, that is a 50% return on invested capital, if and when the stock appreciates to the equivalent level of its peers. The table below provides all the comparisons you need to make your own evaluation.

I don't know what event will kick this stock into high gear, but I didn't know what would do it for SHEP Technologies. It just happened. I know StockGroup is growing (about 50% annually), I know their balance sheet has improved considerably, and I know the Associated Press relationship gives them extraordinary potential for accelerating growth.

Why not invest in shares of StockGroup while it continues to be stuck just under the $.30 level? Then, when the stock finally breaks out, runs up the charts, and everyone wants it, you can be the seller for once.

Here is a table with the comparisons you need. Review, and let me know if you believe StockGroup is probably worth $.42 per share as compared to it peer group today. If you agree, drop back and punt the stock into your portfolio.
 
 

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